The Warner Bros Discovery Board has rejected Paramount Skydance’s US$108.4 billion (A$163.7 billion) takeover bid.
In a letter to shareholders, Warner Bros said that Paramount “consistently misled” shareholders that its US$30 per share cash offer was fully guaranteed, or “backstopped” by the Ellison family, led by billionaire and Oracle CEO Larry Ellison.
The company wrote that the Paramount offer posed “numerous significant risks” and that it was “inferior” to the Netflix merger agreement.
Warner Bros put itself up for sale in October after receiving many expressions of interest from potential buyers, including Paramount Skydance.
At the start of December, the media giant announced that it had agreed to sell its film and streaming business to Netflix for US$72 billion.
While Paramount is yet to comment on the matter, Netflix welcomed the move.
"The Warner Bros Discovery Board reinforced that Netflix's merger agreement is superior and that our acquisition is in the best interest of stockholders," Netflix co-CEO, Ted Sarandos said.
There were some key differences between the Paramount and Netflix deals, other than the price being offered.
Netflix only wanted to buy Warner Bros movie studio and HBO streaming service, giving ti access to the media giant’s rich library of content and secure access to those movies and shows.
However, it didn’t want Warner Bros' pay-TV channels, meaning if Warner Bros goes with this deal, it would have to sell off its television networks, like CNN and TNT, into a separate company before the takeover is complete.
On the other hand, Paramount wants Warner Bros in its entirety.
The deal with Netflix has raised concerns about the erosion of consumer choice and the potential for monopolies in the entertainment industry.
